OPERATING EXPENSES AGREEMENT
This OPERATING EXPENSES AGREEMENT (the "Agreement") is effective as of
the 1st day of July, 1999, by and between Trainer Xxxxxxx First Mutual Funds, a
Delaware Business Trust (hereinafter called the "Trust"), on behalf of each
series of the Trust listed in Appendix A hereto, as may be amended from time to
time (hereinafter referred to individually as a "Fund" and collectively as the
"Funds"), and Trainer Xxxxxxx & Company, Inc. a corporation organized under the
laws of the State of Delaware (hereinafter called the "Manager").
WITNESSETH
WHEREAS, the Manager is an investment adviser registered as such with
the United States Securities and Exchange Commission; and
WHEREAS, the Manager renders investment advice and related services to
each Fund pursuant to the terms and provisions of certain Investment Advisory
Agreements entered into between the Trust and the Manager on behalf of each Fund
(each an "Investment Advisory Agreement"); and
WHEREAS, the Funds are responsible for, and have assumed the obligation
for payment of certain expenses pursuant to each respective Investment Advisory
Agreement that have not been assumed by the Manager; and
WHEREAS, the Manager desires to limit each respective Fund's Operating
Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant to
the terms and provisions of this Agreement, and the Trust (on behalf of the
Funds) desires to allow the Manager to implement those limits:
NOW THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties hereto, intending to be legally
bound hereby, mutually agree as follows:
1. LIMIT ON OPERATING EXPENSES. The Manager hereby agrees to limit
each Fund's Operating Expenses to the respective annual rate of
total Operating Expenses specified for that Fund in APPENDIX A of
this Agreement by reducing, as necessary, the investment advisory
fees payable to the Manager by a Fund under an Investment Advisory
Agreement and/or reimbursing other Operating Expenses of a Fund.
2. DEFINITION. For purposes of this Agreement, the term "Operating
Expenses" with respect to a Fund is defined to include all expenses
necessary or appropriate for the operation of the Fund including
the Manager's investment advisory or management fee payable under
the Investment Advisory Agreement and other expenses described in
the Investment Advisory Agreement, but does not include any Rule
12b-1 fees, front-end or contingent deferred loads, taxes,
interest, dividend expenses, brokerage commissions, expenses
incurred in connection with any merger or reorganization or
extraordinary expenses such as litigation.
3. REIMBURSEMENT OF FEES AND EXPENSES. The Manager hereby retains the
right to receive reimbursement of reductions of its investment
management fees and the Operating Expenses paid or reimbursed by it
in accordance with Paragraph 1, above, for a period ending three
years after the end of the fiscal year in which such fee or expense
was waived or reimbursed, as applicable.
4. TERM. This Agreement shall become effective on the date specified
herein and shall remain in effect until June 30, 2000, unless
sooner terminated as provided in Paragraph 5 of this Agreement.
This Agreement shall continue in effect thereafter for additional
periods not exceeding one (1) year so long as continuation is
approved for each Fund at least annually by the Board of Trustees
of the Trust (and separately by the disinterested Trustees of the
Trust).
5. TERMINATION. This Agreement may be terminated at any time, and
without payment of any penalty, by either the Trust or by the Board
of Trustees of the Trust, on behalf of any one or more of the
Funds, upon sixty (60) days' written notice to the Manager. The
Manager may decline to renew this Agreement by written notification
to the Trust at least thirty (30) days before its Annual expiration
date.
6. ASSIGNMENT. This Agreement and all rights and obligations hereunder
may not be assigned without the written consent of the other party.
7. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute or rule, or shall be
otherwise rendered invalid, the remainder of the Agreement shall
not be affected thereby.
8. CAPTIONS. The captions in the Agreement are included for
convenience of reference only and in no way define or limit any of
the provisions hereof or otherwise affect their construction of
effect.
9. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware without
giving effect to the conflict of laws principles thereof; provided
that nothing herein shall be construed to preempt, or be
inconsistent with, and federal law, regulation or rule, including
the Investment Company Act of 1940, as amended, and the Investment
Advisers Act of 1940, as amended, and any rules and regulations
promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested by their duly authorized officers,
all on the day and year first above written.
TRAINER XXXXXXX FIRST MUTUAL FUNDS
By: _______________________________
Xxxxxx Xxxxxxxx-Xxxxx
Title: President
TRAINER XXXXXXX & COMPANY, INC.
By: ______________________
Xxxxxxx X. Xxxxx
Title: President
Effective: July 1, 1999
Amended: July 30, 2002
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APPENDIX A
Operating
Fund Name Expense Limit
--------- -------------
First Mutual Fund n/a
Trainer, Xxxxxxx Total Return Bond Fund 1.00%
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